Quite a few reports recently claimed that chocolate is recession-proof. It made sense, sort of. When everything else is going down the tube, there’s always chocolate–a little treat in hard times and not too expensive. But it it turned out to be just hearsay.
The International Cocoa Organization (ICCO) reported recently that cocoa grindings, the best indicator of cocoa consumption, will drop 6 percent for the current cocoa year. That’s the largest decrease in a half century.
It turns out that this decline in consumption is matched by a decline in production. Ivorian deliveries to port amounted to 994,000 tons as of May 24 compared to 1,145,851 tons for the same time period of the last season, a decrease of 13 percent. Ghana‘s output also lags behind. As of May 1, COCOBOD has bought 595,000 tons, about 3,000 tons fewer than last season. Finally, Nigeria‘s exports are also down over 12 percent.
The combination of lower production and lower consumption has kept cocoa prices stable. But the declines in demands and the increases in warehouse stocks are beginning to push producer prices down again. According to a Reuters report, this is happening in the Côte d’Ivoire. Farmgate prices for the current week are down as much as 100 CFA Francs ($0.22) per kilo from a week earlier.